July 13 (Bloomberg) -- On the Route 66 site where the
McDonald brothers started a hamburger chain that spread their
name worldwide, Tashia McSwain is waiting for a bus and ruing
the day she moved to San Bernardino, California.

The city of 209,000, an hour’s drive east of Los Angeles
when traffic isn’t at a standstill, had almost twice the U.S.
unemployment rate in April, according to the Labor Department.
The murder rate was three times the national average in 2010,
the FBI said. And its air pollution rated a failing grade from
the American Lung Association, among the worst in the country
last year.

San Bernardino notched its latest distinction this week
when it became the second-largest U.S. city to vote for
bankruptcy protection, sunk by a stagnant economy, rising
employee costs and accounting irregularities, according to city
documents.

“I’ve never liked San Bernardino,” McSwain, an unemployed
44-year-old home-health aide who’s lived here since 1999, said
in front of the original McDonald’s, now a museum not connected
with the world’s largest restaurant chain. “It’s hard to get a
job in San Bernardino -- any job, period. It’s all slumlords out
here. I think the city is doomed.”

Founded in 1810 at the foot of the San Bernardino
Mountains, the community faced hardship in its early years as a
gold rush went bust, according to an account on the city
website. Railroads helped revive the community, which developed
into a suburban center after World War II.

Steel, Railroad

In those days, Judi Penman recalled, San Bernardino was a
safe if humble community with plenty of jobs associated with
Norton Air Force Base, a Kaiser Steel mill, the Santa Fe
railroad and the development of homes and businesses.

“It flourished as a blue-collar town,” said Penman, 69,
now the president of the San Bernardino Area Chamber of Commerce
and the wife of the city attorney, James Penman.

The Air Force base closed in 1994. The steel mill’s
workforce shrank in the 1980s before disappearing altogether,
and Berkshire Hathaway Inc.’s Burlington Northern Santa Fe
transferred most of its local jobs to Topeka, Kansas, in 1992.

The deterioration of the local employment base left scars
on the still-growing community, said Joel Escobar, 69, who grew
up in the city. As early as 1970, Escobar said, the sense of
stability epitomized by nighttime visits to drive-through
McDonald’s restaurants was beginning to fall prey to concerns
about crime.

Today, Escobar said, panhandling and homelessness are a
ubiquitous impediment to a comeback.

‘Cleaning Up’

“The No. 1 thing is cleaning up the city,” the retired
teacher said. “That’s the only way we can attract business.”

As crime and decay stalked San Bernardino, its leaders
concocted revitalization plans that failed to boost the economy,
according to Judi Penman and Sharon Blechinger, 53, whose family
has owned the Mexico Cafe in town since 1951.

The plans included an abandoned effort to develop a chain
of lakes and streams downtown in the early 2000s, a city subsidy
to reopen a shuttered movie theater in the central business
district, and a proposed rapid-transit bus line.

“Different councils over the years have done these kinds
of idiotic things,” Penman said.

Still, San Bernardino’s citizens have withstood surges in
crime, the collapse of the housing market and cuts to municipal
services. Blechinger hosted fundraisers to collect private money
to keep four police dogs in San Bernardino. Meanwhile, the city
with 27 percent of residents below the poverty line supports a
symphony orchestra.

“Because we are a poor community and always have been a
poor community, people give until it hurts for the causes they
believe in,” Penman said.

Outside the McDonald’s museum, seeking shade from 109-degree heat under an awning, retired water-department worker
Charles Nesby, 65, said he hasn’t given up on the city where
he’s lived for most of 15 years.

“It’s a dark day, but perhaps with some unity and some
concern we might be able to save this city,” he said. “It’s
got to be saved.”